Within the next two years the U.S. will surpass Saudi Arabia and Russia to become the largest petroleum producer, according to a new report from the International Energy Agency.
The Paris-based group predicts America will be able to meet almost all its energy needs from domestic sources by 2035 through energy efficiency and increased oil and gas production.
The report also says worldwide energy demand will jump by one-third by 2035, mainly because of growth in Asia. China accounts for most of that growth today. But IEA predicts India and countries in southeast Asia will emerge as the biggest growth engines there in the next decade.
IEA says America’s declining energy costs, especially for natural gas, will give it a big economic advantage over other countries. It forecasts the opposite effect in Europe and Japan, where electricity costs are twice as high, and the cost of imported natural gas is three and five times as high, respectively.
The agency says “perverse” fossil-fuel subsidies in some markets resulted in $544 million in wasteful energy consumption last year. It estimates that such negative incentives, coupled with other market barriers, will block two-thirds of the potential economic benefits of improved energy efficiency.